No rich guy left behind
Bill Would Raise Franchise Value of Sports Teams
By DUFF WILSON
Owners of professional sports teams stand to gain tens of millions of dollars in the values of their franchises because of a single sentence buried deep in a sprawling piece of export-tax legislation now before Congress.
The benefit to sports franchises is contained in a small part of an enormous bill introduced originally to settle a trade dispute with the European Union. But the legislation has since become laden with add-ons for interests ranging from tobacco farmers to Oldsmobile dealers.
The bill, which has been approved by both houses, is expected to go before a conference committee to resolve the differences. The final version is expected to be put before both houses in September, when Congress returns from vacation.
The proposed change affecting sports team owners, which has been passed without hearings or debate, would allow the owners to write off the full value of their franchises over 15 years. Existing law generally limits teams to writing off only the value of player contracts over three to five years. The biggest items subject to the expanded write-offs would be television and radio contracts.
The benefits would apply to newly acquired assets, so current owners would not actually pocket more money, but they could command higher prices when they sell.
Two directors at Lehman Brothers, the investment bank, who specialize in sports banking and tax policy said the change could add 5 percent to sports franchise values. If so, it would represent a $2 billion windfall to franchise values, which totaled $41 billion in 2002, according to Forbes magazine.
"They're doing very well in this," said Robert Willens, a managing director at Lehman Brothers.
